It is likely that those of you at the back of the class will have overlooked the fact that in my Project Airbus suggestion for framing the economy, money was never mentioned.
No need to worry – if the economy is considered as the archetypal joint effort, then money in the economy is just part and parcel of the same joint effort.
The question of what money is available becomes in effect, haven’t you understood? or aren’t you part of this joint effort?
I suggest that the economy can exist without money, but not without credit of things and ideas – and credit, too, in the sense of belief. Belief is where we have been led astray because vested interests have tried to skew beliefs in directions that suit their own narrow, particular interest (a movement started most notably a century ago in twentieth century Austria).
Where an economy does have money – and these days so widespread is the system that many, wrongly but entirely understandably, consider that money defines an economy. It doesn’t, money is simply part and parcel of the joint effort of creating an economy.
Money brings a system of value that offers easy arithmetic, and arithmetic as we all know, is right or wrong. So budgets and accounting easily suggest right and wrong values in the economic system. But that system, the economy, which I suggested could be thought of as Project Airbus is actually the essential, not the values within it (or not) which might be suggested by the arithmetic of money.
Where the reason for the existence of the economy is to promote an optimum outcome to improve lives, the arithmetic of money is just that – arithmetic.
So, I cannot but agree with Professor Stephanie Kelton, when she says ‘Let the budget balance the economy, not the economy balance the budget’*. This puts the cart and horse in the correct order.
The economy is after all, about all its participants’ lives, the budget is a table of figures. Which is more important?
Money is simply a useful servant of the economy.
To put money at the centre of the economy, when it is actually a sometimes useful tool in it, suggests Oscar Wilde’s aphorism that people understand only ‘The price of everything and the value of nothing.’
And that is why our current economy is so dysfunctional.
The participants in our economy surely didn’t consent to money creation in order to be held hostage by it.
*It may not be a precise quote but it summarises the sentiment